Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The treasurer of the Atlas Corporation, Wanda Zinke, is going to bring a $10 million issue to the market in 45days. It will be a 25-year issue. The interest rate environment is highly volatile, and even though interest rates are currently 10.25 percent, there is a fear that interest rates will be up to 11 percent by the time the bonds get to the market.
(A) If interest rates go up by ¾ point, what is the present value of the extra interest this increase will cost the corporation? Use an 11% discount rate and disregard tax considerations.
(B) Assume the corporation is going to short September Treasury bonds at 105 3/32 (hint: 105.09375%). How many contracts must the corporation sell to equal the $10 million exposed position (Hint: Treasury bonds trade on units of $100,000? Round to the nearest whole number of contracts.
(C) Based on your answer in part (B), if Treasury bond prices increase by 2.8 percent of par value in each contract in response to an unexpected ½ point decline in interest rates over the next 45 days, what will be the total dollar loss on the future contracts?
PK Software has 8 percent coupon bonds on the market with 23 years to maturity. The bonds make semiannual payments and currently sell for 109.25 percent of par. What is the current yield on PK's bonds? What is the effective annual yield?
The stock of Bruin, Inc., has an expected return of 18 percent and a standard deviation of 32 percent. The stock of Wildcat Co. has an expected return of 10 percent and a standard deviation of 36 percent. The correlation between the two stocks is .36..
You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.47 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?
A corporation has $5,000,000 of 8% bonds and $3,000,000 of 10% preferred stock outstanding. The firm's financial break even (assuming a 40% tax rate) is?
McGilla Golf is evaluating a new golf club. The clubs will sell for $875 per set and have a variable cost of $430 per set. The company has spent $150,000 for a marketing study that determined the company will sell 60,000 sets per year for seven years..
How have changes in technology contributed to the globalization of markets and production? Would the globalization of production and markets have been possible without these technological changes? A democratic political system is an essential conditi..
Ross Ice Gardens stock commands a market rate of return of 12.5% per year, pays dividends that are expected to increase by 3% per year, and currently sells for $32 a share. Based on this information, what is the expected amount per share of the next ..
Explain the concept of Enterprise Risk Management. How does it differ with the holistic risk management approach? Why did the Harvard Business Review consider it a “game changer” as it applied to strategic planning?
Which type of cost system, process or job order, would be best suited for each of the following: (a) TV assembler, (b) building contractor, (c) automobile repair shop, (d) paper manufacturer, (e) custom jewelry manufacturer? Give reasons for your ans..
Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the next three years. After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity. If the company's stock is cur..
Consider a six-month European call option on a non-dividend-paying stock. The stock price is $30, the strike price is $29, and the continuously compounded risk-free interest rate is 6% per annum. The volatility of the stock is 20% per annum. Value th..
The project is to study the changing trends of the Indian Markets due to the foreign investments, in particular FIIs, its impact, being the single largest investor class in the Indian Markets with respect to current issues.
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd